On August 11, 2023 HCW Biologics Inc. (the "Company" or "HCW Biologics") (NASDAQ: HCWB), a clinical-stage biopharmaceutical company focused on discovering and developing novel immunotherapies to lengthen healthspan by disrupting the link between inflammation and age-related diseases, reported financial results and recent business highlights for its second quarter ended June 30, 2023 (Press release, HCW Biologics, AUG 11, 2023, View Source [SID1234634273]).

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"During the period ended June 30, 2023, we have made significant progress in crystalizing our understanding of the anti-cancer mechanism of action of HCW9218, especially in relation to how it complements immune checkpoint inhibitors ("ICIs"). HCW9218 has a unique mechanism that we believe allows it to turn a ‘cold’ tumor into a ‘hot’ tumor, potentially opening up the possibility of improving the response rate for checkpoint inhibitors which has remained stubbornly low," stated Dr. Hing C. Wong, Founder and CEO of HCW Biologics.

Dr. Wong continued, "Our excitement about the potential of HCW9218 as a combination therapy with checkpoint inhibitors is fueled by key discoveries made as a result of extensive animal testing in different cold tumor models. First, HCW9218 stimulates and expands progenitor exhausted stem-like T cells and transitory CD8+ effector T cells in the tumor draining lymph nodes followed by trafficking of these cells into the tumors. This opens a pathway for enhancing the anti-tumor activity of checkpoint inhibitors. Secondly, HCW9218 also substantially lowers the TGF-β activity in the tumor microenvironment to lessen immunosuppression. This further boosts the ICI response to block the PD1/PDL1 axis and enhances the anti-tumor activity of HCW9218-activated CD8+ effector T cells."

Business Highlights:

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In a Phase 1 clinical trial to evaluate HCW9218 in the treatment of chemo-refractory/chemo-resistant solid tumors, sponsored by the Masonic Cancer Center, University of Minnesota, the first patient was dosed in the expansion phase of the trial. There has been no dose-limiting toxicity to date. The Company expects this trial to be completed in the second half of 2023 and intends to disclose human clinical data from this trial and the mechanism of action underlying HCW9218 anti-cancer activities at a major industry conference prior to the end of the year.
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In a Company-sponsored Phase 1b clinical trial to evaluate HCW9218 in the treatment of chemo-refractory/chemo-resistant pancreatic cancer, the trial has completed two dose escalation cohorts and has begun a third, with no dose-limiting toxicity to date. The Company expects this trial to be completed late in 2023 or early 2024, with a human clinical data readout in the first half of 2024.
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On April 21, 2023, the Company entered into a secured Development Line of Credit Agreement with Prime Capital Ventures, LLC, as lender, pursuant to which the Company may borrow up to $26.3 million with a scheduled maturity date of April 20, 2028. In connection with this loan, the Company established a $5.3 million deposit for interest reserve. The Company plans to refinance its existing long-term debt with some of the proceeds from this line of credit. On August 10, 2023 the Company obtained construction permits required to begin the buildout of its new headquarters. This satisfies the final condition precedent to accessing the $26.3 million line of credit.
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On June 13, 2023, the Company was granted U.S. Patent No. 11,672,826 by the United States Patent and Trademark Office which contains methods of use claims directed to administering HCW9218 to treat various forms of cancer, including colorectal cancer, breast cancer, ovarian cancer, hepatocellular carcinoma, gastric cancer, urothelial carcinoma, and melanoma.

Second Quarter 2023 Financial Results:

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Revenues: Revenues for the quarter ended June 30, 2022 and 2023 were $454,000 and $622,807, respectively. Revenues for the six months ended June 30, 2022 and 2023 were $3.6 million and $664,690, respectively. Revenues were derived exclusively from the sale of licensed molecules to the Company’s licensee, Wugen. The licensed molecules are one of the inputs for manufacturing Wugen’s products. We expect Wugen to limit its purchases in 2023, due primarily to changes in its clinical development program and delays in ramping up its manufacturing process.

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Research and development (R&D) expenses: R&D expenses for the quarter ended June 30, 2022 and 2023 were $2.0 million and $1.6 million, respectively, a decrease of $353,216, or 18%. R&D expenses for the six months ended June 30, 2022 and 2023 were $3.8 million and $3.9 million, respectively, an increase of $112,921, or 3%. The change is primarily attributable to a decrease in preclinical expenses and manufacturing costs and an increase in costs associated with clinical trial activities. As of June 30, 2023, the Company anticipates it has the required supplies of its lead molecules, HCW9218 and HCW9302, in place to provide for planned clinical development activities for the next 24 months. Manufacturing costs in 2023 primarily reflect ancillary costs of shipping, storage and insurance. Preclinical costs were incurred to complete IND-enabling activities for HCW9302. In first half of 2023, IND-enabling activities focused on additional research studies required for the Company’s IND submission. The Company expects to submit an IND application for permission to conduct a clinical trial to evaluate HCW9302 in an autoimmune disorder by the end of 2023.

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General and administrative (G&A) expenses: G&A expenses for the quarter ended June 30, 2022 and 2023 were $1.7 million and $3.0 million, respectively, an increase of $1.3 million, or 76%. G&A expenses for the six months ended June 30, 2022 and 2023 were $3.6 million and $6.1 million, an increase of $2.5 million, or 71%. The increase was primarily attributable to increases in professional fees, which include legal fees associated with legal proceedings brought against the Company by Altor BioScience, LLC and NantCell, Inc., or Altor/NantCell.

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Net loss: Net loss for the quarter ended June 30, 2022 and 2023 was $3.5 million and $4.3 million, respectively, an increase of $793,859, or 23%. Net loss for the six months ended June 30, 2022 and 2023 was $5.6 million and $9.4 million, an increase of $3.8 million, or 68%.

Financial Guidance

As of June 30, 2023, the Company held $17.4 million in cash, cash equivalents and U.S. Treasury bills of short duration. In addition, there were prepaid expenses of $6.6 million, including the $5.3 million deposit for interest reserve. The Company funded $3.2 million toward the new lab and manufacturing facilities while awaiting permits to begin construction and activating access to project financing. Funds for this project will be provided from financing in the future. With the current cash, cash equivalents and U.S. Treasury bills on hand, the Company has adequate capital to fund operations and other commitments to Q4 2024.

On April 27, 2023, in connection with the Altor/NantCell matter, the U.S. District Court for the Southern District of Florida (the "Court") approved the parties’ stipulation and ordered the parties to arbitration. On May 1, 2023, Altor/NantCell filed a demand against the Company before JAMS. On May 3, 2023, Altor/NantCell dismissed the federal court action without prejudice and the Court ordered the case dismissed without prejudice and closed the case. Altor/NantCell’s proceeding against the Company is now proceeding in arbitration before JAMS. Although adverse decisions (or settlements) may occur in arbitration, it is not possible to reasonably estimate the possible loss or range of loss, if any, associated therewith at this time. As such, no accrual for these matters has been recorded within the Company’s financial statements. In the year ahead, the Company expects to continue to incur legal expenses on its own behalf in connection with the legal proceedings brought against it by Altor/NantCell. However, legal expenses incurred by Dr. Wong in connection with the arbitration against him that was initiated by Altor/NantCell, are covered through advancement of expenses from Altor/NantCell.

On August 11, 2023 Decibel Therapeutics (Nasdaq: DBTX), a clinical-stage biotechnology company dedicated to discovering and developing transformative treatments to restore and improve hearing and balance, reported financial results for the second quarter ended June 30, 2023 and provided a corporate update (Press release, Decibel Therapeutics, AUG 11, 2023, View Source [SID1234634272]).

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"This week we announced a definitive agreement with Regeneron Pharmaceuticals to acquire Decibel, which we believe reflects the tremendous promise of gene therapy for hearing loss," said Laurence Reid, Ph.D., Chief Executive Officer of Decibel. "We remain highly focused on executing on the CHORD clinical trial and excited by the potential benefit that DB-OTO may provide to people with otoferlin-related hearing loss. With six active clinical trial sites at prestigious institutions across three countries, we continue to work towards our goal of addressing this unmet medical need."

Pipeline Highlights and Upcoming Milestones:

Gene Therapies for Congenital, Monogenic Hearing Loss

Phase 1/2 CHORDTM Dose Escalation Clinical Trial of DB-OTO in Pediatric Patients:

DB-OTO is an AAV-based dual-vector gene therapy product candidate designed to be delivered one time to selectively express functional otoferlin (OTOF) in the inner hair cells of individuals with OTOF deficiency with the goal of enabling the ear to transmit sound to the brain and enable durable, physiological hearing. Decibel has been developing DB-OTO in collaboration with Regeneron Pharmaceuticals.
In May 2023, Decibel announced the initiation of CHORD, a global Phase 1/2 dose escalation clinical trial of DB-OTO in pediatric patients. Decibel has opened clinical trial sites in the U.S., the U.K. and Spain and has commenced patient screening activities. DB-OTO received Orphan Drug Designation from the European Medicines Agency (EMA) Committee on Orphan Medicinal Products (COMP) in May 2023, adding to its Orphan Drug and Rare Pediatric Disease Designations from the U.S. Food and Drug Administration (FDA).
Continued Progress with IND-Enabling Activities to Support the Advancement of AAV.103 for GJB2-Related Hearing Loss Program:

In March 2023, Decibel achieved a pre-investigational new drug (IND) milestone under its collaboration agreement with Regeneron Pharmaceuticals related to the initiation of manufacturing of AAV.103, Decibel’s gene therapy product candidate designed to restore hearing in individuals with mutations in the gap junction beta-2 (GJB2) gene, the leading cause of autosomal recessive, non-syndromic, congenital hearing loss worldwide.
Otoprotection Therapeutic

Received FDA Breakthrough Therapy Designation for DB-020:

In July 2023, Decibel received FDA Breakthrough Therapy Designation for DB-020, a novel, proprietary formulation of sodium thiosulfate (STS), designed to protect against hearing loss in cancer patients receiving cisplatin chemotherapy. This was supported by Decibel’s Phase 1b clinical trial in which 87% of treated patients experiencing ototoxicity in their placebo-treated ear were partially or completely protected from ototoxicity. Breakthrough Therapy Designation is intended to expedite the development and review of medicines intended to treat serious or life-threatening conditions that have preliminary clinical evidence indicating that the drug may demonstrate substantial improvement over available treatments. A Breakthrough Therapy Designation conveys all the fast-track program features, more intensive FDA guidance on the drug development program, an organizational commitment involving senior FDA managers and eligibility for rolling review and priority review.
Corporate Update:

Announced definitive agreement for Regeneron Pharmaceuticals to acquire Decibel:

On August 9, 2023, Decibel and Regeneron announced the entry into an agreement for Regeneron to acquire Decibel to build on the existing collaboration, and accelerate and further resource key gene therapy programs for hearing loss. The proposed acquisition values Decibel at a total equity value of approximately $109 million based on the amount payable at closing, and a total equity value of up to approximately $213 million if the contingent value right (CVR) milestones are achieved.
Second Quarter 2023 Financial Results:

Cash Position: As of June 30, 2023, cash, cash equivalents and available-for-sale securities were $78.3 million, compared to $104.6 million as of December 31, 2022.
Research and Development Expenses: Research and development expenses were $12.8 million for the second quarter of 2023, compared to $11.2 million for the same period in 2022. The increase in research and development expenses for the second quarter 2023 was primarily due to higher clinical development and related costs for the Company’s Phase 1/2 clinical trial of DB-OTO, additional regulatory and clinical costs for DB-020, and higher personnel-related costs due to increased headcount, wages and stock-based compensation.
General and Administrative Expenses: General and administrative expenses were $6.2 million for the second quarter of 2023, compared to $5.9 million for the same period in 2022. The increase in general and administrative expenses for the second quarter 2023 was primarily due to increased facility-related costs due to decreased sublease income and higher personnel-related costs due to increased headcount, wages and stock-based compensation, partially offset by decreased professional fees year over year.

On August 11, 2023 Black Diamond Therapeutics, Inc. (Nasdaq: BDTX), a clinical-stage precision oncology company developing MasterKey therapies that target families of oncogenic mutations in patients with genetically defined cancers, reported financial results for the second quarter ended June 30, 2023, and provided a corporate update (Press release, Black Diamond Therapeutics, AUG 11, 2023, View Source [SID1234634271]).

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"The second quarter of 2023 marked a crucial period of clinical and operational execution for Black Diamond, and I am incredibly pleased with our initial dose escalation data demonstrating a favorable tolerability profile and clinical proof of activity for BDTX-1535 in NSCLC patients harboring acquired resistance and intrinsic driver EGFR mutations. With these data in hand, we believe we are well positioned for rapid advancement of this novel MasterKey inhibitor for NSCLC patients and are looking forward to meeting with FDA later this year to discuss our dose optimization strategy that may enable a potential accelerated approval pathway as well as the opportunity to study BDTX-1535 in newly diagnosed NSCLC patients with intrinsic driver mutations," said David Epstein, Ph.D., President and Chief Executive Officer of Black Diamond Therapeutics. "Our recently completed underwritten public offering provides us with a strong cash position and extended runway to execute on the robust set of upcoming milestones for BDTX-1535 and our broader pipeline, all with the goal of bringing our MasterKey therapies to patients in need."
Recent Developments & Upcoming Milestones:

BDTX-1535:

•In June 2023, Black Diamond announced initial clinical data from the dose escalation portion of the Phase 1 clinical study of BDTX-1535, an epidermal growth factor receptor (EGFR) MasterKey inhibitor, demonstrating a favorable tolerability profile and clinical proof of activity in non-small cell lung cancer (NSCLC) patients harboring both acquired resistance and intrinsic driver EGFR mutations. Key highlights from the readout include:

◦Confirmed radiographic partial response (PR) by RECIST 1.1 achieved across predicted therapeutic doses in 5 of 12 NSCLC patients in a subgroup, who had measurable disease at study start, and underwent post baseline tumor assessment by RECIST 1.1. One additional patient demonstrated unconfirmed PR, while the remaining six patients had stable disease.
◦Confirmed PRs were observed in NSCLC patients with a wide range of EGFR mutations including classical and intrinsic driver mutations and acquired C797S resistance mutation, as well as complex mutations that include a combination of classical, intrinsic, and acquired resistance mutations. Two NSCLC patients demonstrated radiographic improvement in the peripheral disease and central nervous system (CNS) metastases.
◦BDTX-1535 was generally well tolerated by NSCLC and glioblastoma multiforme (GBM) patients and the overall safety profile was consistent with the EGFR tyrosine kinase inhibitor (TKI) class of drugs. The most common drug-related adverse events were mild to moderate rash, diarrhea, stomatitis, paronychia, nausea and fatigue. No patients experienced dose limiting toxicity at 15-200 mg once-daily (QD) doses. One of 15 patients treated at the 300 mg QD dose experienced dose limiting diarrhea and 5 of 12 patients at the 400 mg QD dose experienced dose limiting toxicity (diarrhea, 2 patients; rash, stomatitis, fatigue and decreased appetite, 1 patient each). No unexpected safety signal was identified during dose escalation.
•In July 2023, Black Diamond initiated expansion cohorts to assess overall response rate (ORR) by RECIST 1.1 in NSCLC patients with EGFR acquired resistance mutations after progression on a third generation EGFR TKI and intrinsic driver mutations after progression on an EGFR TKI.
•Black Diamond anticipates the following key milestones for BDTX-1535:
◦Presentation of the full BDTX-1535 dose escalation data in NSCLC at a medical conference in the fourth quarter of 2023.
◦Meeting with the U.S. Food and Drug Administration (FDA) in the fourth quarter of 2023 to align on dosing strategy to enable a potential accelerated approval pathway in NSCLC.
◦Initiation of an expansion cohort in newly diagnosed NSCLC patients with intrinsic driver mutations after discussion with the FDA.
◦Clinical update on BDTX-1535 Phase 1 dose escalation data in recurrent GBM patients in the fourth quarter of 2023.

BDTX-4933:
•BDTX-4933 is designed as a brain-penetrant, oral MasterKey inhibitor of oncogenic BRAF Class I, II and III and RAS mutations, while also avoiding paradoxical activation.
•In April 2023, Black Diamond presented a poster at the 2023 American Association of Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting, outlining its approach to characterizing RAF, RAS and MAPK pathways in addition to the design and preclinical development of BDTX-4933. Based on preclinical data, BDTX-4933 has a potential best-in-class profile to treat cancer patients harboring oncogenic BRAF Class I, II, III and RAS mutations, with or without brain disease.
•Black Diamond initiated a Phase 1 clinical trial for BDTX-4933 in select indications for patients harboring all-class BRAF or RAS mutations in the second quarter of 2023.
BDTX-4876:

•BDTX-4876 is a development candidate FGFR 2/3 MasterKey inhibitor, selective against FGFR 2 and 3 alterations, while sparing FGFR 1 and 4.
•Black Diamond is evaluating strategic alternatives for BDTX-4876 as it deepens focus on its two clinical-stage assets.
Discovery-Stage Pipeline and MAP Drug Discovery Engine:
•Black Diamond continues to leverage its Mutation-Allostery-Pharmacology (MAP) drug discovery engine to advance its discovery-stage pipeline to bring therapies to underserved patients and expects to progress another undisclosed program in solid tumors to development candidate nomination in 2023.

Corporate:

•In June 2023, Black Diamond announced the promotion of Melanie Morrison to Chief Development Officer.
•In July 2023, Black Diamond closed an underwritten public offering (Follow-on Offering) of 15,000,000 shares of its common stock at a public offering price of $5.00 per share for gross proceeds of approximately $75.0 million, before deducting underwriting discounts and commissions and other offering expenses.
Financial Highlights
•Cash Position: Black Diamond ended the second quarter of 2023 with approximately $89.5 million in cash, cash equivalents, and investments compared to $122.8 million as of December 31, 2022. Net cash used in operations was $14.4 million for the second quarter of 2023 compared to $18.1 million for the second quarter of 2022.
•Research and Development Expenses: Research and development (R&D) expenses were $13.2 million for the second quarter of 2023, compared to $16.2 million for the same period in 2022. The decrease in R&D expenses was primarily due to reduced clinical trial activities stemming from the discontinuation of the development of BDTX-189 to focus on advancement of the Company’s pipeline programs, BDTX-1535 and BDTX-4933.
•General and Administrative Expenses: General and administrative (G&A) expenses were $6.9 million for the second quarter of 2023, compared to $7.0 million for the same period in 2022. The decrease in G&A expenses was primarily due to a decrease in legal and other professional fees.
•Net Loss: Net loss for the second quarter of 2023 was $20.0 million, as compared to $23.2 million for the same period in 2022.

Financial Guidance

•Black Diamond ended the second quarter of 2023 with approximately $89.5 million in cash, cash equivalents and investments. The Company believes that the net proceeds from the Follow-on Offering, together with its existing cash, cash equivalents and investments, will enable the Company to fund its operating expenses and capital expenditure requirements into the first half of 2025.

On August 11, 2023 Aeglea BioTherapeutics, Inc. ("Aeglea" or the "Company") (NASDAQ:AGLE), a biotechnology company advancing a pipeline of antibody therapeutics with the potential to transform the treatment of inflammatory bowel disease ("IBD"), reported second quarter 2023 financial results and provided program and corporate updates (Press release, Aeglea BioTherapeutics, AUG 11, 2023, View Source [SID1234634270]).

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"With the acquisition of Spyre Therapeutics and concurrent financing, we are in a privileged position to create meaningful new medicines for patients with IBD and build an industry-leading development organization," said Cameron Turtle, DPhil, Chief Operating Officer of Aeglea. "Our pipeline of differentiated and potentially best-in-class IBD programs, including 47 and TL1A, combined with a strategy to investigate therapeutic combinations and precision medicine approaches, offers the possibility to transform the treatment of this chronic and debilitating disease."

"In parallel, we have made significant progress streamlining the organization with the sale of pegzilarginase and pivoting our operations and strategy around the new IBD assets," said Jonathan Alspaugh, President and Chief Financial Officer of Aeglea. "We are working to rapidly advance our co-lead product candidates with an expectation of initiating clinical studies for both SPY001 and SPY002 in 2024."

Recent Program and Corporate Updates

Corporate

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Completed the asset acquisition (the "Acquisition") of Spyre Therapeutics, Inc. ("Spyre"), a privately held biotechnology company with a pipeline of antibody therapeutics possessing the potential to transform the treatment of IBD alongside its research partner, Paragon Therapeutics, Inc. ("Paragon").
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Raised $210.0 million in gross proceeds (before deducting approximately $12.7 million in placement fees and other offering expenses) through a sale of Series A non-voting convertible preferred stock (the "Series A Preferred Stock") in a private placement to a group of investors.

IBD Portfolio

With the Acquisition, Aeglea shifted its focus to the development of a potentially best-in-class IBD portfolio including:

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SPY001 – a highly potent and selective anti-α4β7 monoclonal antibody engineered with half-life extension technology and formulated for high concentration, convenient dosing.
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SPY001 is currently progressing through IND-enabling studies and is expected to enter first-in-human ("FIH") studies in the first half of 2024. Data from a healthy volunteer study are expected by the end of 2024.
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SPY002 – a highly potent and selective anti-TL1A monoclonal antibody engineered with half-life extension technology. TL1A has emerged as one of the most promising targets in IBD and broader immunology indications.
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We expect to begin FIH studies of the SPY002 program in the second half of 2024 with healthy volunteer data expected in the first half of 2025.

Pegzilarginase

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Sold global rights to pegzilarginase in development for Arginase 1 Deficiency to Immedica Pharma AB ("Immedica") for $15.0 million upfront cash proceeds and up to $100.0 million of contingent milestone payments. The sale of pegzilarginase to Immedica supersedes the previous license agreement between the companies.
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Marketing Authorisation Application for pegzilarginase is under review by the European Medicines Agency.
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The milestone payments are contingent on formal reimbursement decisions by national authorities in key European markets and pegzilarginase approval by the FDA, among other events.
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Net proceeds of the sale are to be distributed to holders of contingent value rights ("CVR") pursuant to the terms of the CVR Agreement dated July 7, 2023 by and between the Company and a rights agent.

Second Quarter 2023 Financial Results

As of June 30, 2023, Aeglea had available cash and cash equivalents and restricted cash of $236.7 million, including the $210.0 million in gross proceeds from the private placement offering in June 2023.

Aeglea recognized development fee and royalty revenues of $0.7 million in the second quarter of 2023, as a result of its license and supply agreement with Immedica for the commercial rights to pegzilarginase in Europe and several countries in the Middle East. The revenues recorded in the second quarter of 2023 are related to drug supply and royalties from an early access program in France. Aeglea recognized $0.6 million for the second quarter of 2022 in development fee revenues.

Research and development expenses totaled $17.4 million for the second quarter of 2023 and $15.4 million for the second quarter of 2022. The increase was primarily related to restructuring costs net of savings and an increase in reimbursable costs under the Paragon Agreement (as described below).

General and administrative expenses totaled $12.1 million for the second quarter of 2023 and $7.7 million for the second quarter of 2022. This increase was primarily due to restructuring costs, net of savings.

Acquired in-process research and development expenses totaled $130.5 million for the second quarter of 2023 and no expenses for the second quarter of 2022. As the Spyre assets have no alternative use, the net assets acquired are expensed in the period acquired.

Change in the fair value of forward contract liability expense was $58.2 million for the second quarter of 2023 and no expenses for the second quarter of 2022. The stock consideration provided in the Acquisition was not issued until July 7, 2023. Accordingly, the Company recognized a forward contract liability to represent the contractual obligation to issue stock as of June 30, 2023. The increase in expense represents the change in fair value between June 22, 2023 (the Acquisition date) and June 30, 2023 for the redeemable Series A Preferred Stock.

Net loss totaled $217.1 million and $22.3 million for the second quarter of 2023 and 2022, respectively, which includes non-cash stock compensation expense of $1.9 million and $2.0 million for the second quarter of 2023 and 2022, respectively.

On August 10, 2023 Oncopeptides reported its interim report for Q2 2023 (Presentation, Oncopeptides, AUG 10, 2023, View Source [SID1234634922]).

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